Federal Student Loan Rates to Increase July 1

(HELENA) On July 1, the low rates on federally guaranteed student loans will go up, said Jim Stipcich, president of Student Assistance Foundation (SAF). The federal Stafford loan rate is expected to rise nearly 2 percentage points, increasing loan rates to almost 7 percent, while the federal Parent Loan for Undergraduate Students (PLUS) rate is expected to rise 2.4 percentage points to 8.5 percent.

"The rate increases mean higher interest payments for students and graduates over the life of their loans," Stipcich said. "It’s important to know that you can save hundreds or even thousands of dollars on student loans by locking in the current, low interest rates with loan consolidations before the July 1 deadline."

Unfortunately, loan consolidations for students currently enrolled and planning to stay in school will permanently end on July 1. "The opportunity to consolidate student loans will still be available for graduates and those out of school," said Stipcich. "But after July 1, the interest rates will be higher."

According to Stipcich, SAF wants to help students consolidate their loans and save money. "We like to think our service and contributions to Montana make a compelling reason for folks to stay local," he said. "However, the July 1 deadline is an important enough event that no matter who consolidates the loans, students and parents need to weigh the costs and benefits so they don’t miss this opportunity."

Stipcich advises those seeking loan consolidations to look for a company that:

• Has a solid history of stable and improving discounts and loan benefits,
• Is a loan servicer, or partnered with a loan servicer, recognized as an Exceptional Performer by the U.S. Department of Education,
• Provides servicing for the life of the loan, and
• Employs salaried, noncommissioned loan counselors that have the students’ best interests in mind.

For more information on loan consolidations, students or parents can call SAF at 800.852.2761, ext. 9750.

SAF, a nonprofit organization based in Helena, provides students with knowledge and tools to finance and pursue their post-secondary education. Funds generated by SAF are returned to Montanans in the form of education grants and public benefit programs.

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